Catégorie : Economy

An interesting comment from Mike T. this morning on Macquarie, the australian bank who financed PL clubs growth got me thinking about the economics of the PL.

Their chances (and those of the other lenders against upcoming revenue) to recover their money seems slim. And now even the governement says the games should be broadcast to all, which will dent the whole revenue model more.
Now broadcasters seem to be arguing that because games don’t ake place at set times days and times, they need not pay.
o they may move any game around whenever they wish, yet force majeure does not apply to them.
Just think about the underlying logic. All fans are starved for games. They won’t be able to go see the games. Do you expect they’ll tune in or not ?
So maybe advertising revenue may end up higher as more spectators are expected, so broadcasters may get some of their revenue after all ?
I can bet you the restart of the Bundesliga will be an event as watched as the kickoff to a World Cup.

So I guess they are just looking for a way out of paying. One wonders how come all the MBA’s and high priced lawyers of the Premier League, the richest in the world, did not include some force majeure clause….but this is another story. My opinion is that the Premier League is riddled with incompetence, within and around it : all of football in England is a play ground of incompetent people.

To me, some of these clubs or their owners have wanted to play poker or roulette. Or probably most of them
Some came to the table with a cartload of money and with wealth that guarantees they won’d have to leave the PL asino anytime soon.
Others wanted to join the club at all costs and set up a venture to do just that. Suffice to look at the owners of PL and Championship clubs to see that.
And most bet way above their means. So, now they’ll have to leave the table. And the clubs will tumble into lower leagues or go bankrupt.
I have no problem with a viable (and correctly run) company getting governement help. But these casino players, well, the taxpaying citizen does not have to be asked to finance their seat at the table.
Some billionnaire does not have the means or does not want to keep on spending on his club ? Tough luck them. He sells it, or goes bankrupt and faces all consequences.
And if the finances were not well managed, too much risk taken, well the guys who signed need to pay for their errors as any small business owner has to do.Laws ought to apply to all.
And the last time I checked, the Premier League is in no way systemic, is it ?

Sure, the players, employees will have a problem. But this happens when any company goes bankrupt and we don’t see much of a report in the press about them, do we ?
Personnaly, I’d be more worried about the staff, their wages are ‘normal’, they have the most to lose. Players ? Well, they took on the career, they chose the clubs they play for, they earned generally way more money then any of us, so in no way are they worse off.
In the end, it ought to be a survival of the fittest situation

And if the PL ends up with 10 teams ? Well they’ll play each other 4 times in a season and over the ensuing years, some Championship teams may come up based on finances and results. Would broadcasters be against showing Liverpool- United 4 times a year ? I don’t believe so.

As for broadcasters losses, well, tough luck guys. You are the ones who accepted to pay more, who took risks, who have the university degrees present on the management floor of your corporate buildings, who hire the expensive lawyers and consultants. Sue them and leave us alone. Why should we care at all, after all the examples of you not respecting the fan in the stadium and the paying subscriber ?

In a time when a recession is starting that looks like it will hurt many, when the health system of the country is in dire straits, any idea of the governement coming out to save casino players sounds obscene to me. Privatising profit and mutualising losses accross the country is not acceptable. Banks did get away with it, arguing they were ‘systemic relevant’. I can’t think how the Premier League or the FA would be classified in the systemic relevant category.

One solution out of this mess may be to transfer all clubs who go bust into some ‘Bad club fund’.
Said fund would pay the ‘little people’ owed by the club and look for buyers.
Anyone wanting to ‘buy’ the club would have, in return for use of the ground, the brand, the name, etc. to repay the fund for a number of years, covering what was owed and interest.
Who knows, maybe the clubs’ own fans may be interested in crowdsourcing a restart-
This way, there is no need to come up with hundreds of millions in one shot, but with a plan that makes sense, a competent management team and a vision.
The funds that would be invested would be vetted so as to avoid mafia or autocratic like takeovers.

But then again, such a scenario would need a will to solve the problem and competent people preparing for it and actually running it. Which I don’t think the PL nor the FA has shown as having available.

Just an idea, but why would it not be possible to apply to football recipes that worked for another casino like industry : the banking system ?

However, at some point, survival of the fittest still must apply, and frankly, I do hope it will.